Public-private Collaboration From Research to Market Yigal Erlich, Founder Yozma

Eco-system Mixture of knowledge, innovation and entrepreneurship High quality of human resources Entrepreneurial culture Commercialization of Research (TTO’s) Strong presence of major global technology companies Critical mass: capital, investors, VC funds, start-ups Modern legal, IP regime and financial infrastructure Government support: incentive plans, tax benefits

Israel's Academic Institutions - Technology Transfer Companies (TTC) Institutions TTC Hebrew U. (Jerusalem) Yissum Tel-Aviv U. (TA) Ramot Technion (Haifa) Mosad Technion Weizmann Inst. (Rehovot) Yeda Ben-Gurion U. (Beer-Sheba) B.G.Negev Hadassah U. Hospital (Jerusalem) Hadasit 2014 – 31 new companies were established by TTO’s CSO – Magneton, ToT program, up to $1mil for 24months

Share of patents owned by industry OECD

Foreign ownership of domestic inventions, OECD

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Government Involvement Market Failure ( ): - Early stage, high risk, innovative technological enterprises can not raise money from the private sector. only. Government response: - Chief scientist grants - Technological Incubators Program - VC

Government OCS Support Programs Ministry of Industry, Trade and Labor (MOITAL) Office of the Chief Scientist Generic R&D Competitive R&D National Pre-Seed Tnufa Nofar Technological Incubators Cooperative R&D Applied Academic Research Basic R&DMarket Proximity EUREKA Bi-national Funds IR C ISERD (Europe FP) International Global Enterprises R&D Cooperation Bi-national Agreements Galile o Magnet Long-Range R&D Magneton Industrial R&D Traditional Industry Upgrade Program

Incubators Volume of Operation 23 incubators distributed across Israel: - 20 technological incubators - 2 technology based industrial incubators - 1 biotech designated incubator Approximately 8 projects per incubator Every year ~70 new start-up companies are established in the incubators. Over 50% continue operations at least 3 years after graduation Since inception: 1600 companies; $770mil' -government investment; $5bil' -private

Incubator Support (Added Value) Appropriate facilities and R&D infra-structure Financing Inter-tenant synergism Management & Central administrative services Network Connections Professional Technological & Business guidance

13 Government Funding VS Private Investments |

14 Fields of Activity | Pre-Seed and Seed Programs Incubators Sectors

The Israeli VC Ecosystem VC Investments by Sector 2013 – Internet is Growing

Professional VC funds  Capable to raise funds  Choosing the right investments  Managing the investments  Building value for exit Government role in investments vs. VC Government Involvement  Risk sharing  Market failure conditions  Government as a catalyst  Predetermined exit conditions  No government control  Indirect investments (funds)

Investments in Israeli Startups (10 year record) 10-Year Total: $ 17b Israeli VC Funds: 35% of total, 2013: 22% Increased activity by foreign investors

The Israeli VC Ecosystem - Exits 10-year total: $51b M&As: $47b, 93% of Total VC-Backed: $22b, 43% of Total

Select Multinationals Presence in Israel Actively seeking Technology Innovation

Israel VC – Performance More than 8000 startups established NASDAQ: 70 Israeli high-tech companies are listed Human capital emerged as Israel’s main resource M&A: $77 billion, IPO: $7.6 billion raised $15 billion raised by Israeli VC funds $2 billion invested in the VC sector Global recognition as a leading innovative technology center, 2 nd only to the Silicon Valley VC – the Accelerator of the High-Tech Industry Innovation and Growth The economy growth engine

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The R&D Fund Budget is approximately $300M. The R&D Fund is the main instrument of The R&D Law. It gives grants to “Approved R&D Programs”, which are lasting one or more years, resulting in the development of a new product or in a significant improvement to an existing product/process. Grants are from 20 percent to 50 percent of the total approved R&D expenditures of the approved projects.

Traditional Industries Support within the R&D Fund Special track is dedicated to Traditional Industries (industries characterized by relatively low investment in R&D). This track offers separate evaluation and discussion for projects. The Fund supports projects at the maximum level of 50%. Since 2006, 350 companies approved and provided grants of about $150M by the OCS.

Early Stage Program Support within the R&D Fund  The target is young companies, less than 3 years from establishment.  Designed for projects of up to $2,500,000 with a duration of up to 24 months.  Grants are 50% of the approved budget, and the company must be a first time applicant for OCS.  Sales volume is less than $150,000 annually.  Royalty payments 3% - 5% of the future product sales.

TNUFA  Budget -$4M  National pre-seed fund, assists individual inventors and nascent start-up companies during earliest stages of their projects.  Includes evaluation of the technological and commercial potential, and assistance drafting an initial business plan.  Grants of up to 85 percent of approved expenses are available to a maximum of approx. $65,000 per project.

Magnet-Generic R&D  Budget – $47M.  Supports consortia of industrial companies and academic institutions.  Target: jointly develop generic, pre competitive technologies or disseminate existing new technologies.  The technology cannot be acquired from commercial sources at competitive prices.  Grants of up to 66% - no royalty repayments.

MAGNETON  Promotes technology transfer from academia to industry, in order to reduce uncertainty before the technology is used by the firm in new developments.  Designed for projects of up to $800,000 with duration of up to 24 months.  Grants are up to 66% of the approved budget.  No royalty payments are mandated.

NOFAR – Industrial Application of Academic Research  Supports applied academic research in specific technological areas (biotechnology, nanotechnology, medical devices, water & energy storage), in order to adapt it to relevant industrial applications.  Project's budget is up to $130,000 for a period of 12 months.  Grants are up to 90% of the approved budget.  No royalty payments are mandated.

KAMIN - Promotion of Selected Applied Research  Designed to serve as an additional bridge between basic and applied research, for projects not yet ready for commercial investment.  Opportunity for academic research groups with projects at the applied phase, to continue in the applied direction for up to two years at a level of support of %.  The research institute is responsible for the remainder of the R&D costs.  No royalty payments are mandated.